Tuesday, 28 July 2015

It
would be nice to think that Turkey’s abrupt about-face on joining the war
against ISIS was solely the result of President Tayyip Erdoğan’s long-delayed
and agonized conclusion that the barbaric Sunni Islamic terrorist group was a
threat to Turkey as well as Iraq and Syria. Alas, things in Turkey are never
that simple or straight-forward.

Ever since ISIS appeared on the
scene Erdoğan has been reluctant to commit his massive armed forces to stopping
ISIS or allowing American fighters to use the large Incirlik air base in
southern Turkey. His refusal to help the beleaguered town of Kobani last winter
sent a message to the Kurds that he preferred ISIS to Kurdish control of
northern Syria.

What happened to change his mind? Why
did he suddenly see the light? Now, about six months after the successful
Kurdish and American defence of Kobani, the proximate cause for his change of
heart was the July 20 suicide bombing in the Turkish town of Suruç where at
least 31 people – most of them Turkish Kurds -- were killed. The bombing was
attributed to ISIS and finally caused Turkish policy makers to get off the
fence and join the fight. So goes the Turkish government narrative.

The reality is a bit more
complicated. It is not lost on many people in Turkey that this change of heart coincides
with a nasty bit of domestic politics. Erdoğan and the AKP suffered a major
set-back in the June 7 parliamentary elections. AKP, thanks in large part to
the predominantly Kurdish People’s Democratic Party (HDP) that polled far better than anyone
suspected, failed to secure enough votes to form a government by itself for the
first time since 2002. This dealt a severe blow to Erdoğan’s dream of changing
the constitution to make the presidency a strong, unchecked, unchallenged
position. Any coalition resulting from the elections would never allow that development.

This
is unacceptable to Erdoğan. Few people doubt that he now spends more time
plotting an early election this fall than working to form a strong coalition
government. In order to get better results for the AKP he has do something to reduce
the votes for the HDP that, in addition to the Kurds, is also supported by much
of what is left of the Turkish liberal intelligentsia.

Bear with me while we do a little
election math here. In order for any single party in Turkey to form a
government it must win at least 276 of the 550 seats in parliament. AKP easily
accomplished this in every election from 2002 – 2015. This year, however, a new
party (HDP) entered the elections and had a real chance to win at least 10% of
the total vote, a requirement to send any
MPs to parliament. HDP surprised everyone by winning more than 13% of the
vote and sending 80 MPs to parliament, thus depriving AKP of its controlling majority
as it won only 258 MPs. This was a very unpleasant surprise for Erdoğan who was
now faced with the real possibility that a coalition government would restrict
his powers. Worse, such a coalition government could even start seriously
investigating corruption charges against former ministers and Erdoğan’s friends
and family.

The Kurdish-based HDP won a solid hold on the southeast and east parts of Turkey

Ever since the election Erdoğan and
his anointed successor as prime minister, Ahmet Davutoğlu, have dragged their
feet on forming a coalition government. Erdoğan at least would much prefer to
take his chances on a second election this fall in hopes that AKP would get
more than 276 MPs.

The only real way for this scenario
to work would be to somehow drive HDP below the 10% threshold and for AKP to
reclaim those 80 MPs. There were a total of just over 46 million votes cast in
the June election, and HDP won more than six million of those votes. Driving
HDP under the 10% barrier would require a swing of almost two million votes away from HDP. It’s difficult to see any
of the Kurdish voters changing their votes, and I don’t believe any of the
liberals who voted for HDP would suddenly recant and send their votes
elsewhere.

Who are the main opponents of the large Turkish army?

Erdoğan’s only alternative is to
play the Turkish nationalist card and accuse the HDP of being nothing more than
a front for the Kurdish guerrilla group the PKK. This entails ripping up his
loudly publicized ‘peace process’ with
the same PKK. Between now and November he would hope to drive home the image of
AKP as the only hope for stability and peace by associating HDP with instability
and terrorist violence.

By suddenly agreeing to work with
the Americans against ISIS Erdoğan also opens the door for renewed Turkish air
attacks against Kurds in northern Iraq and Syria – all in the name of
preventing the spread of allegedly Kurdish-inspired terrorism to Turkey. It’s
almost as if he is saying, “I told you so. This is what voting for the HDP gets
you.” In addition to the guilt by association strategy, there are growing calls
from Erdoğan loyalists and ultra-nationalists who loathe the Kurds to ban HDP
altogether.

But will this transparent strategy
achieve its goal? This is a very risky policy because it is not even clear that
the AKP could hold onto the votes it won in June let alone increase them. And,
unless HDP is banned, it is difficult to see its solid hold on the southeast
weakening. Furthermore, there are threats of serious cracks within the AKP as
some of the founders of the party strongly disagree with what has happened to
their party under Erdoğan’s autocratic rule. Meanwhile the inconclusive, insincere
coalition dance continues as the country faces another several months of
instability in the run-up to yet another election.

Tuesday, 30 June 2015

The
only funny thing about the sad situation in which Greece finds itself is
reading essays about what the Greek people ‘must’
or ‘must not’ do from renowned
economists and leading academics writing comfortably from their offices
thousands of miles from the turmoil. They are not the ones lurching from crisis
to crisis worrying about when the money runs out, when the pharmaceuticals run
out, when their pensions run out, or even if the food runs out.

In
a perfect world Krugman might be right. If, and it is an enormous ‘if’ Greece had a smoothly functioning
bureaucracy, a government determined to institute sweeping reforms, a political
class not wedded to corruption and cronyism, and no deeply entrenched groups from
protected business interests to pampered
public service employees with a strong interest in preserving the dysfunctional
status quo such a recipe might work. But, alas, we are dealing with the reality
of modern Greece and not some theoretical classroom exercise. And that sad
reality is that without those sweeping reforms what remains of the Greek
economy, regardless of the currency in use, will most certainly contract further.

Syriza
could have been an agent of change.
It could have instituted long-overdue
reforms and, in the process, generated the revenue to improve the welfare of
the people. Instead, it has proven to be nothing more than an extension, a
particularly incompetent extension, of the failed political system that has
decimated Greece over the last several decades. And the sad thing is if it had
committed to these reforms it could have minimized the hated ‘austerity’. And the really sad thing is that the price of this intransigence is being
borne by the very people Syriza said it wanted to help – the poorest sectors of
the Greek population.

It
chose instead to implement its school-boy theories, which by the way have not
worked anywhere in the world, and substitute revolutionary rhetoric for real achievement.
In the process their hypocrisy and deceit have succeeded only in alienating
just about everyone who was in position to help. It would have been interesting
to see, for example, if the creditors would have taken a softer tone if the
government had moved aggressively on revenue producing reforms like privatization
or breaking the stranglehold of protected businesses. But all we heard were
thunderous pronouncements against such steps. One could almost hear the Euro
Group, the IMF and the IMF pleading with Syriza to ‘give us something to work with.’ But the only thing that emerged
were half-baked demands for debt reduction. Fine, but in return for what –
precisely? I can imagine Christine Lagarde, managing director of the IMF,
asking the Greek government what it would do to help itself.

One
can argue that the European institutions made a serious error a few years ago
by bailing out the private banks that had recklessly loaned massive amounts to
Greece. How often should tax payers be required to rescue private banks that
should have known better? When do they these banks have to pay the price for
their mistakes? Wouldn’t it have been much better to force those foolish banks
to take the necessary hair-cut to reduce Greek debt to manageable levels? The
problem was only compounded when public institutions assumed that debt. All
this may be true. But, as The FinancialTimes Martin Wolf puts it, those are now ‘sunk costs’ and it is time to move on.

Meanwhile
the drama is played out on the streets of Greece as most economic activity grinds
to a halt pending the outcome of Sunday’s so-called referendum called by Prime
Minister Alexis Tsipras. The 72-word question is a ridiculous summation of
complicated financial discussions that very few people can possibly understand.
The legal grounds for the referendum are not even clear, because currently
there is NO deal on the table. What, exactly are people voting on? Whatever the
stated question may be, most people seem to understand that the real issue in
this referendum is Greece’s position not only in the Eurozone but in the
European Union itself.

A
friend on the island of Andros had an interesting solution to his anger at the
government and the uncertainty of the current situation – independence. “We
should immediately declare independence from the oppressive, idiotic regime in
Athens! We could build a real economy here based on out maritime history, but
including other centers of excellence such as financial and health care.” All
it needs now is a Declaration of Independence. We are, after all, close to July
4th.

Sunday, 21 June 2015

There
is, unfortunately, very little optimism about the critical meeting on Monday,
June 22 with Greece and its creditors. There is very little reason to think
that the institutions controlling much of Greece’s enormous debt are going to
bend on their demands for economic/social reforms in Greece before releasing
more cash. And there is even less reason to hope that the rigid ideologues that
now run Greece have the slightest intention of implementing reforms that might
help Greece but would weaken their political position.

If the talks fail there is a very
good chance that Greeks would rush to pull whatever funds they have left out of
the banks, thereby creating the situation that would call for capital controls.
Another logical consequence is that Greece would fail to make scheduled
payments to the International Monetary Fund and would start on the slippery
road to default and possible exit from the Euro.

A reasonable person might think this
is a scenario to be avoided at all costs. It could plunge Greece into the
economic unknown and severely intensify the poverty and hardship already suffered
by many in the country. But that same reasonable person would be making the
same mistake that Greece’s European counterparts have been making for the past
five months, i.e. believing that the ruling Syriza party has any interest in
compromise or making a mutually beneficial agreement.

All one had to do is listen closely
to Prime Minister Alexis Tsipras’s comments at the opening of the new
parliament or the comments of other Syriza MPs and ministers to understand the
total commitment to a failed ideology. Various Syriza MPs have said over and
over again that the government should never sign a deal and that returning to
the drachma with the ensuing economic chaos would be a very good thing. The
Minister of Education said a key policy of his ministry would be to eliminate
the concept of excellence in education. Who knows? Perhaps in his mind such a
thing as educational excellence smacks too much of the dreaded elitism. Maybe he really does think a generation of morons can compete with the Chinese and Indians who have no problem promoting excellence. In his opening speech Tsipras
mentioned four times the Greek word roughly translated as equalization. Only now are people realizing that his version of
social and economic equalization is to drag the top down, not bring the bottom
up. In his brave new world everyone is the same – they’re all desperately poor
with no hope for the future. Even today at the 11th hour Greece’s
finance minister Yiannis Varoufakis is saying that he hopes the creditors will
fulfil their responsibilities to save
Greece and, by the strange extension of his unique logic, all of Europe.
Needless to say he failed to say much about Greece’s own responsibility to come
up with a realistic compromise.

In the beginning many in the
European Union thought Tsipras’s opening remarks last winter were just part of
electioneering. Surely, they thought, he would become more rationale in time,
and separate himself from the leftist ideologues in his own party. Wrong. A
Greek journalist friend in Brussels made an interesting observation early in
the negotiations. “Too many people here
think there is a difference between the ‘good’ Tsipras and the ‘bad’ hard left
element of the party. They’re wrong. There is no difference at all.”

Perhaps the most surprising element
of all, however, is the inability of very smart people in Greece to mount any
opposition to these destructive developments. Where is the broad-based
communication program pointing out to ordinary Greeks just how much they will
suffer under new drachma regime? Why
leave the moral high ground to Syriza? Perhaps there is a fatalistic acceptance
of what is considered inevitable.

I remember a dinner party last fall
in Athens when a group of lawyers and businessmen were discussing what would
happen if Syriza won the election. Most were modestly hopeful that disaster
could be avoided. One former bank executive had a very succinct response to the
question. “Train wreck. Huge train wreck.
That’s what will happen. Perhaps from the rubble we can build a good economy.” That
certainly was a conversation stopper.

Another businessman, one who pays
all his taxes and obeys the country’s labyrinthine regulations was beside
himself with anger. “These liars will
ruin everything! They are going to turn us into the North Korea of the Aegean.
They have no idea of the damage they are causing for generations. Any young
person in Greece with an IQ of room temperature will leave.”

But again, why are these sentiments
restricted to private conversations? Where is the leadership of the opposition?
It takes more than dry speeches in parliament to counter Syriza’s bombardment
of mis-information.

An exasperated Greek-American who
recently moved back to Greece is re-thinking his decision. “These idiots in government are ruining what
could be paradise! They have succeeded in something I thought was impossible.
They have made Jersey City, New Jersey look better than Greece. That takes
talent.”

Wednesday, 3 June 2015

With
just three days remaining before the critical Turkish elections the noise is
reaching deafening crescendo levels, the streets are blanketed in party
posters, and party leaders continue their furious pace around the country
trying to convince voters that they and only they can put the country on the
right course. And, above all else, speculation on the outcome and post-election
scenarios has replaced football as the favourite national pastime.

As
we all discovered in the British elections last month polls can be misleading.
They can miss underlying trends by asking the wrong question or taking at face
value what people tell the pollsters. Polls in Turkey are even more useless.
And the media merely takes the side of whoever owns that particular outlet. If
the media owner owes his fortune to the ruling Justice and Development Party
(AKP) it’s a safe bet that his broadcast outlet or newspaper will claim that
Turkey without President Tayyip Erdoğan will rapidly go down tubes. And if the
owner is brave enough to oppose Erdoğan you can bet his TV station or newspaper
will lay all of Turkey’s present and future problems at his doorstep.

Election posters cover all available space

Nonetheless,
even with all these caveats, your fearless correspondent has asked a number of
people from different walks of life about their predictions for these elections.

One
expat who has been in Turkey for a number of years offered one of the more
cynical opinions.

“The
AKP will definitely get enough votes and deputies to change the constitution to
give Erdoğan what he wants. Erdoğan and his henchmen will do whatever is
necessary to keep the Kurdish party (HDP) just below the 10% threshold for
entering parliament. This may be a cynical reaction, but I have learned never
to underestimate Erdoğan’s ability to generate, one way or another, the outcome
he wants. Too many people are confusing what they hope will happen with what will
happen.”

The
other extreme came from another friend who admittedly has no love for AKP, but
has been observing Turkish politics for several decades.

“This
time AKP will get only 35% - 38%. The main opposition Republican People’s Party
(CHP) will get 28% - 32%, the nationalist party (MHP) will get 14% - 17%, and
HDP will get 12% - 15%. With this scenario AKP will definitely fail to get
enough deputies to form a single party government. Even worse for them is that
a group of 50 – 60 AKP deputies could split off and form an independent group
inside the parliament.”

A
Turkish cab driver in New York was more succinct. “The country has finally
woken up. Those b…… won’t even get 40%. They’re just frauds and phonies.”

A
London-based young Turkish professional also believes the AKP vote will fall to
the low 40% level and that HDP will succeed in entering parliament. But he
warns not to forget the Gülenists, referring to followers of the Islamic
scholar Fetullah Gülen who are accused by Erdoğan of running a parallel
government within Turkish state institutions. “They hate Erdoğan and are
running as independents in many districts. Some of them will enter parliament
and cause problems for AKP. Watch the post-election manoeuvring. That will be
fascinating.”

An
Istanbul housewife who typically supports CHP says she will vote for the
Kurdish party this time. “I have been trying to convince all my friends to vote
for HDP. It’s critical that they cross the 10% threshold. I think that AKP’s vote will fall to just
above 40%, still the biggest party but not powerful enough to force a
constitution change. CHP could get as much as 27%, MHP around 17% and HDP could
get 11% - 12%.”

The all-important ballot box

Another
long-term expat who accurately predicted the outcome of last summer’s
presidential election agrees that AKP’s vote share will drop sharply this time.

“They
will probably get somewhere around 43%, CHP 26%, MHP 17% and HDP between 10% -
11%. The actual HDP votes will have to be quite a bit higher than the final
number because of potential election fraud. They could lose a lot of votes
because some of Erdoğan’s more fervent followers will try anything to make sure
HDP stays below 10%. AKP will be close to getting enough deputies to form a
single-party government, but won’t have enough to change the constitution.”

One
of the intriguing things about this election is the persistent rumours of sharp
tensions within the AKP that could lead to post-election re-alignment of
alliances. One rumour gaining some traction is that Prime Minister Ahmet
Davutoğlu is tired of Erdoğan’s constant interference and wants to assert his
own power. According to this scenario he would not be at all unhappy if Erdoğan
failed to the constitutional change allowing for a strong president. He could
then put Erdoğan back into his box and carry running the government in a
rational fashion with his own people. Davutoğlu has gone out his way, for
example, to state that his plans for economic reform and growth are far
different from Erdoğan’s.

Tayyip
Erdoğan has dominated Turkish politics for more than a decade, and desperately
wants to consolidate his position by changing the constitution to create a
strong executive presidency enabling him to rule with no checks or balances. Even
though he is not running for anything this time, this election is in large
measure a referendum on him. But Turkish society has changed a great deal since
2002. It remains to be seen if Erdoğan’s old father-knows-best approach will
work with an increasingly assertive group of voters. One can only hope that
massive fraud does not derail the results and plunge the country into chaos.

Monday, 18 May 2015

A
possible sign that Turkey’s notoriously inaccurate election polls may for once
be on the right track is the increasingly shrill and often bizarre behaviour of
the ruling Justice and Development Party (AKP) in the run-up to June’s general election.

Since
storming to power in 2002 the AKP has swept every election with overwhelming
majorities and maintained its strong grip on single-party government. Now, due
a host of factors including a weak economy, fatigue with President Tayyip
Erdoğan, corruption and disunity within AKP that tight grip is being
challenged. One of the main threats is coming from the Kurdish-based People’s
Democratic Party (HDP) with its charismatic, pop-star-like leader Selahattin
Demirtaş. If Demirtaş can lead his party over the absurd 10% barrier to enter
parliament it can pose a serious threat to AKP’s ability to rule by itself
without a coalition.

The
panicked response of AKP to this threat indicates that the polls showing HDP
close to the 10% goal might just be accurate. Elections in Turkey have always
been raucous affairs with accusations of wholesale vote rigging, threats of
violence, massive demonstrations, and lots and lots of loud noise. But this one
is going even further.

AKP
minions, led by Erdoğan who is supposed to be above such things as president,
are busy labelling the Kurdish party as:

·Terrorists

·Atheists

·And
my favourite, ‘Zoroastrians’. For
those of you whose knowledge of Zoroastrians is as limited as mine I recommend
a wonderful book about remnants of ancient Middle Eastern religions called Heirs to Forgotten Kingdoms by Gerard
Russell. He writes that the Zoroastrian faith dominated Persia until the
Islamic conquest in the 7th century. There are only a very few
Zoroastrians remaining in modern Iran, but, even so, Erdoğan now counts them as
an existential threat to Turkey in the form of a Kurdish political party.

Assaults on the
HDP are growing beyond verbal absurdities. So far there have more than 50
attacks on HDP election offices across the country. Yesterday there were
serious bomb attacks on two HDP offices in the cities of Adana and Mersin. Two
senior AKP officials condemned the attacks, and no one has claimed responsibility.
And no suspects have been found.

Scene after bomb at HDP office in Mersin

A sign of AKP
desperation is the fact that Ahmet Davutoğlu, the prime minister and official
head of the party, has been almost completely side-lined. He is perceived as a
weak campaigner, and Erdoğan has gladly leapt into the breach with his almost daily
fire-and-brimstone speeches about the catastrophe that awaits Turkey if the AKP
fails to win enough deputies to form a single-party government.

In another indication
of AKP nervousness, some party stalwarts are demanding the few remaining
opposition media outlets be shut down and their assets confiscated.

Then there is the very strange
incident of rumours about a possible Turkish military incursion into Syria, an
incursion that could cause the elections to be postponed thereby staving off
potential embarrassment for the AKP. These rumours were quickly followed by the
surprise decision of the Chief of Staff of the Turkish army to take a 15-day
medical leave. It is well known that the army is firmly opposed to any such
Syrian adventure, and the absence of the Chief of Staff makes any move into
Syria very difficult. The conspiracy theorists are having a field day with this
one, but it will be quite a while before anything resembling the truth emerges.

Even more serious are the mounting
concerns about voter fraud. With the judiciary and the theoretically
independent election commission firmly under government control many people are
concerned that the results will mysteriously turn out to be in AKP’s favour,
regardless of the actual vote. A friend in London recalled that in the last
election there were more votes cast in several districts than the total number
of registered voters in those districts. There are also leaked reports of massive
government efforts to ‘control’ the results. Opposition parties say they will
send thousands of monitors to the polling sites, but it is not clear how
effective they will be.

Iran faced widespread protests after the flawed 2009 election

This is where Erdoğan has to be very
careful. It is one thing if HDP legitimately fails to surpass the 10% barrier.
It is quite another if the party suspects that electoral fraud kept them out of
parliament. Erdoğan should remember the 2009 eruption of the Green Revolution
in Iran following the disputed election of Mahmoud Ahmadinejad. Similar accusations in Turkey would go viral
in a matter of moments leaving the so-called Kurdish ‘peace process’ in
tatters.

Erdoğan may or may not like the results of this election, But one hopes he realizes that nothing
would improve Turkey’s democratic standing in this troubled region more than
letting the results, whatever they may be, unfold without interference.

Followers

About Me

I worked as a fund manager and investment banker in Turkey and the Middle East for 25 years. Over the years I have travelled extensively throughout the region and have met many of the leading government officials, business and cultural leaders. I am married to a Greek and now divide my time between London, Turkey, and an island in the Aegean.